The CCI, by its order dated January15, 2016 has approved the proposed combination relating to the acquisition of 26.11% shareholding of the paid-up equity share capital of the Cipla Health by Fidelity Mauritius, on a fully diluted basis, by way of subscription to fresh equity shares and compulsory convertible preference shares. Further, Cipla proposes to transfer its over-the-counter (OTC) consumer business (“Target Business”) to Cipla Health by way of a slump sale.

The Target Business proposed to be transferred by Cipla to Cipla Health comprises of "Nicotex", "Nicogum" and "Cofsils" (including generic manufacturing know-how; brands and all product variants), certain product ideas under development, and contractual arrangements (including purchase, manufacturing, marketing services and distribution arrangements).

Fidelity Mauritius is part of the proprietary venture capital arm of FIL Limited. The acquirer's principal business activity is to hold investments and it does not have any subsidiaries, branches or offices in India. Further, Cipla is a public limited company incorporated under the provisions of the Companies Act, 1956 and is stated to be engaged in the business of pharmaceuticals. It has been further submitted that Cipla Health has been recently incorporated as a wholly-owned subsidiary of Cipla and does not have any subsidiary.

It was submitted that the acquirer does not have any direct or indirect shareholding and/or control over enterprises, in India, that have any presence in the products comprising the Target Business or which are engaged in a vertical relationship with the products comprising the Target Business.

As such, the CCI was of the opinion that the proposed combination was unlikely to cause AAEC in India. The CCI approved the combination.